What We Might Learn From Mitt Romney’s Tax Return

When he was asked about whether he would release his return by NBC’s Chuck Todd just before Christmas, he replied that “we don’t have any current plans to release tax returns, but never say never.”

But after losing the South Carolina primary, Romney’s campaign revealed that it would release his 2010 tax return. It’s widely believed that Romney’s reluctance to release his returns contributed to the loss, although Romney’s team denies this and the opinion polls don’t really show much evidence of it.

So what will we learn about Romney’s fortune when the 2010 returns are released Tuesday? Probably not very much.

We will learn what his reported income in 2010 was. We’ll learn what tax rate he paid on that income and what kind of deductions he took.

We’ll learn whether he classified most of his reported income as “ordinary income” or “capital gains,” which receive a preferential tax rate.

But the vast majority of his income is likely to come from his investment portfolio. Much of that is likely to be dividend income and long-term capital gains—although it’s likely we won’t be able to tell how much is from “carried interest” he earns from his years as the head of Bain Capital and how much is from other investments in the market.

Romney's campaign has already confirmed that he has money invested in the Cayman Islands. We may find out whether off-shoring has tax-advantages for Romney personally, or whether this is a holdover from his time at Bain.

You can expect, in any case, that the returns will be getting a lot of attention Tuesday.

And the issue might be far from over. Some critics are already saying that releasing a single year’s tax return is not adequate.